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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 17 May 2019, 10:33 AM

 

PublicInvest Research Headlines - 24 Apr 2019

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Economy

US: New-home sales rise to 16-month high, topping estimate. Sales of new US homes unexpectedly rose in Mar to a 16-month high, with a third straight increase that reflects a boost from lower borrowing costs. Single-family home sales rose 4.5% to a 692,000 annualized pace that exceeded all estimates in Bloomberg’s survey, while Feb’s figure was revised down slightly. The median sales price decreased 9.7% YoY to a two-year low of USD302,700. The surprisingly strong reading the second-best pace of the economic expansion suggests lower mortgage rates, rising wages and the Federal Reserve’s pause on borrowing costs are helping the housing market regain its footing. (Bloomberg)

US, China: An emerging crisis in China could give US the upper hand in trade talks. China’s worsening African swine flu crisis could give the US an edge over China as the two countries try to hammer out a trade agreement. China has been ravaged by an outbreak of African swine flu recently, a virus for which there is no cure or vaccine. The outbreak has led to more than a million pigs being culled, according to the Chinese government. The flu is harmless to humans but is deadly and contagious to pigs. This could lead to even higher hog prices, which are already putting pressure on the Chinese consumer and could force China to make concessions in its negotiations with the US. (CNBC)

China: Belt and Road is getting a reboot to clean up its image. Chinese President Xi Jinping’s grand Belt and Road Initiative is getting a makeover to tone down government rhetoric and tighten oversight, after allegations of corruption and a lack of sustainability dogged some of its highest-profile projects. Beijing is taking a range of steps to exert more control over the program including a more muted publicity drive, clearer rules for state-owned-enterprises, restricting use of the BRI brand, and building overseas auditing and anti-corruption mechanisms. (The Edge)

Indonesia: Jokowi seeks spending boost as Indonesia targets higher growth. Indonesian President Joko Widodo called for an increase in capital spending to bolster growth as a slowing global economy, the US-China trade war and rising oil prices pose risks to SEA’s largest economy. Jokowi laid out his budget priorities for next year. The president sought to boost investment and exports to sustain economic growth, while underscoring the importance of continuing the infrastructure drive that was a key plank of his first term and development of human resources as a top priority. (Bloomberg)

Markets

Sime Darby (Neutral, TP: RM2.54): Abu Dhabi energy firm seeks annulment after RM46m claim against unit rejected. Sime Darby said Emirates International Energy Services (EMAS) has filed an application at the Abu Dhabi Court of Appeal, seeking the annulment of an arbitration tribunal award. This refers to the rejected arbitration claim by EMAS against Sime Darby Energy SB (SDE) worth 41.05m UAE dirham (RM46.47m), which was issued on Dec 23, 2018, along with a supplementary award issued on March 4, 2019.. (The Edge)

Kerjaya Prospek: Lands RM438.8m building job. Kerjaya Prospek Group has secured a contract worth RM438.8m for construction of main building works for a proposed development project. It secured the job from Kerjaya Prospek Property SB, a related party. The contract covers the construction of main building for the proposed mixed development comprising a 25-storey block of offices and hotel and two 53-storey blocks of serviced apartments on top of an 11- storey podium and four levels of basement at Jalan Puchong, Kuala Lumpur. (The Edge)

Salcon: Bags RM39.8m Langat 2 pipe installation package. Salcon has secured a RM39.8m works package from Pengurusan Aset Air (PAAB) to supply and install mild steel pipes for the Langat 2 Water Treatment Plant and Water Reticulation System. The 12- month contract is scheduled for completion on May 15, 2020, and the installation will start from the AU3 reservoir to the existing reticulation system at Jalan Jelatek and Jalan Enggang.

Ekovest: Proposes RM202m private placement as stock soars. Ekovest has proposed to raise up to RM202.6m by placing out as much as 256m new shares to independent third party investors to be identified at a later date. Proceeds from the exercise, will be utilised to reduce its debts and pay for property development projects. For the proposed share placement exercise, Ekovest has assumed an indicative price of 79sen a share, which is the volume weighted average market price of the stock in the past five days. It will set aside RM100m from the fund raising scheme to reduce its debts. (The Star)

Boilermech: Buys land in Indonesia for RM15.66m to build new plant. Boilermech Holdings is acquiring land in East Java for Rp54bn (RM15.66m) to build a new manufacturing plant. PTBMI signed an agreement with PT Maspion Industrial Estate for the acquisition of three adjoining portions of vacant industrial land measuring in total 30,000 square meters. The group intends to construct a manufacturing plant on the acquired land, mainly for the fabrication of palm oil mill boilers. The purchase price will be satisfied in cash using internally-generated funds. (The Edge)

Destini: Destini-Avia JV secures Malindo, Thai Lion aircraft safety equipment jobs. Destini Avia Technique SB (DAT), a 50:50 JV company between Destini and UK-based Avia Technique Ltd, will provide aircraft safety equipment maintenance support to Malindo Airways SB and Thai Lion Mentari Co Ltd. This follows the signing of an agreement to supply, test, repair and/or carry out overhaul activities on aircraft safety equipment for both airlines for a three-year period with an option to extend for another two years. DAT would perform the services on escape slides, oxygen cylinders, crew oxygen bottles and fire extinguishers, emergency locator transmitters, oxygen masks and life preservers. (The Star)

Market Update

The FBM KLCI might open with a positive bias today US stocks reached a record high on Tuesday as investors, reassured by recent dovish signals from central banks, extended a months-long recovery in spite of continued uncertainty over the outlook for the global economy. The benchmark S&P 500 ended the day 0.9% higher at 2,933.7 thanks to the best daily gain for healthcare stocks since mid-January and a rally in consumer discretionary and technology shares. That pushed the equities benchmark past its peak closing level from September 20 last year of 2,930.8. The Dow Jones Industrial Average rose 145.34 points, or 0.6%, to 26,656.39, less than 1% away from its record. The Philadelphia semiconductor index that tracks 30 companies in the industry is at record highs, while the NYSE Fang Plus TM index, which tracks the Faangs and other large tech stocks, is still about 8 percent shy of its peak in June 2018. European markets also finished higher with shares in London leading the region. The FTSE 100 was up 0.85% while France's CAC 40 added 0.20% and Germany's DAX rose 0.11%.

Back home, the FBM KLCI index gained 5.38 points or 0.33% to 1,627.44 points on Tuesday. Trading volume decreased to 3.73bn worth RM2.48bn. Market breadth was negative with 406 gainers as compared to 443 losers. Asian markets finished mixed with the Nikkei 225 gained 0.19%, while China's Shanghai Composite was off 0.51%. Shares in Hong Kong were unchanged with the Hang Seng at 29,963.24.

Source: PublicInvest Research - 24 Apr 2019

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